In an SEC filing, the company stated that Trump's reputation was an important factor in its financial success.
Digital World said its financial footing could be adversely affected.
Truth Social is accused of stiffing a vendor out of more than one million dollars.
The future of the former president's social media platform, Truth Social, is in doubt as it faces huge financial losses and is accused of shorting its vendors.
A planned merger between the business that created the Truth Social platform and a special purpose acquisition company has been put on hold as the Securities and Exchange Commission investigates the platform's business dealings
Digital World was formed to raise funds through an initial public offering or to combine with an existing company. SPACs have no other commercial activities. Digital World stated in an SEC filing that it had neither engaged in any operations nor generated any revenues to date as its sole purpose was to prepare to take Truth Social public.
Digital World requested shareholder approval to delay the merger due to concerns over the former president's reputation.
If President Trump becomes less popular or there are further controversies that damage his credibility or the desire of people to use a platform associated with him, and from which he will derive financial benefit, the results of operations, as well as the outcome of the proposed Business combination, could be
Digital World's stock went from a high of $97.54 a share to a low of $27.52 a share in less than six months, and the company lost $6.5 million in the first half of the year.
Truth Social's trademark application was denied on Thursday because it was too similar to "Vero - True Social."
According to Fox Business News, Truth Social is locked in a bitter battle with its vendor, RightForge, and is accused of stiffing the hosting service out of $1.6 million.
According to three people with direct knowledge of the situation, Truth Social stopped making payments to RightForge in March.
Contractors who worked at the Trump International Hotel and a small business owner who said Trump stiffed him $100,000 worth of pianos have faced similar payments before. The Taj Mahal Casino Resort had $90 million in unpaid bills, while Trump's DC hotel had $5 million in contractors fees not paid.
A number of companies that were associated with Trump have filed for bankruptcy, and there can't be any assurances that he won't do it again.
Representatives for Trump, TMTG, Truth Social and RightForge did not respond to Insider's questions.
Business Insider has an article on it.
All Rights Reserved © 2024
